Defining the context

- The first step in any negotiating process is definingand understanding the context you're operating in.You have to understand the strategic environmentof the negotiation in order to be successful.There are several elements to defining this context.First, who is the decision maker?And why are they doing this?The better you understand these players and what they'retrying to get out of the negotiation, the moresuccessfully you're going to be able to approach them.

Second, define your goals.What are you interested in and what do you need.By laying out these objective functions you can focus onachieving them during the negotiation and make surethat you don't accidentally give them up.Third, what are the outcomes that are in play?What's at stake?So when you look at the final negotiation, what are thosepossible end states.What do you risk losing?What do you risk gaining?Next, define the other options you're considering.

Many negotiations have many different outcomesthat you can pursue.By defining what these options are, you're better ableto determine which one you should pursue.And last, what will it take to close the deal?Trying to get a clear understanding of what's going tolead the other party to say yes and what's going toget approval on your end for the negotiation is critical.An example of a negotiation I went through where we had toclearly define the context, was when we were tryingto buy back a franchise operation.

The owners were looking to cash out.They wanted to sell their franchise backto us as a corporation.Our goal was to buy access to their market,but do so at a reasonable price.So these were the goals of the parties that were involved.Now, the options we had available to us were eithera full purchase of their territory or no saleand they would retain it.We couldn't buy a portion of it and we couldn't enterthat market without making a purchase.

So, we had those two option that we had tothink through and evaluate.And then last, we had to understand that it would takesignificant cash up front and we had to look at ourability to pay that as well as what that offer would beworth to the franchise owners.By laying out this complete context to the negotiation,we made our negotiating position much strongerbecause we understood what we wanted to get out of the deal.As you look at negotiations you enter, make sure youtake the time to define this context and document itso you can go back to it on a regular basis,test your assumptions, and stay on trackto achieve your goals.

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Released

10/6/2015

Learn negotiation skills to help you get what you want while also building better relationships with coworkers, bosses, business partners, and suppliers. In this course, leadership consultant and trainer Mike Figliuolo shares simple yet effective negotiating skills and tools. He covers the four major phases of the negotiating cycle and explains how to assess your situation, gather data, negotiate a deal, and then assess and learn from your experience. He also explains common negotiating pitfalls and what you can do to avoid them.